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PepsiCo (PEP) Q4 2020 earnings beat projections


Pepsi soft drinks are displayed at a convenience store in San Francisco, California.

Justin Sullivan | Getty Images

PepsiCo on Thursday reported fourth-quarter earnings that topped estimates, fueled by pandemic snacking and higher sales of drinks like Gatorade Zero and Bubly sparkling water.

On the heels of the strong quarter, the beverage and snacks maker said it expects its 2021 results to meet long-term financial targets.

Shares of the company gained nearly 1% in premarket trading. Pepsi’s stock has fallen 6% over the last year, giving it a market value of $189 billion.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $1.47, adjusted vs. $1.46 expected
  • Revenue: $22.46 billion vs. $21.78 billion

The company reported fiscal fourth-quarter net income of $1.85 billion, or $1.33 per share, up from $1.77 billion, or $1.26 per share, a year earlier.

Excluding items, Pepsi earned $1.47 per share, beating the $1.46 per share expected by analysts surveyed by Refinitiv.

Net sales rose 8.8% to $22.46 billion, topping expectations of $21.78 billion. The company’s organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, grew by 5.7%.

Frito-Lay North America saw its organic revenue grow 5% during the quarter. Tostitos and Cheetos were among the brands that consumers reached for when shopping for at-home snacks. However, the segment’s operating profit fell due to higher restructuring charges and increases in some operating costs.

Quaker Foods’ organic revenue increased by 8%. As many consumers still work from home, they’ve turned to buying maple syrup and pancake mix for breakfast. On Tuesday, Pepsi renamed its Aunt Jemima brand to Pearl Milling Company after saying in June that the character was based on a racial stereotype.

Its North American beverage unit saw its organic sales rise 5.5%. Pepsi typically receives less of its sales from away-from-home occasions than rival Coca-Cola does, so the segment’s organic revenue turned positive in the third quarter. Gatorade Zero, Bubly and its Starbucks-branded coffee drinks helped drive sales.

For 2021, Pepsi is anticipating mid-single-digit growth in organic revenue and high-single-digit growth in core earnings per share, which assumes constant foreign currency exchange rates. The company is also hiking its dividend by 5%, starting in June.

“For 2021, we are planning for our organic revenue and core constant currency EPS growth to be consistent with our long-term objectives,” CEO Ramon Laguarta said in a statement.

Read the full report here.



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